THOUGHT LEADERSHIP
want to change supplier, for whatever reason you’d have to change the modem, or indeed a whole host of them. By definition, Satellite IoT tends to be deployed in remote or even hazardous locations, adding a logistical ordeal to the already evident cost implication. The inherent ‘stickiness’ is attractive, which is likely why new entrants Swarm, Kinéis, SAS, Astrocast and Myriota opted for a proprietary model. The proprietary model is not in and of itself a barrier to lower costs. Although we’re not seeing an abundance of new satellite networks emerging, more operators will enter the field, leading to greater competition and reduced costs. The alternative is to launch new satellites that are compatible with unmodified terrestrial devices, now made possible by the 3GPP standard. This makes devices and satellites interoperable when they’re both designed and built. A single module will be able to carry multiple radio technologies and critically, users should be able to switch between satellite network operators in the same way, conceptually, as an eSIM allows users to switch between cellular networks, which would potentially lead to greater confidence over airtime pricing. Chiefly, it’s the newer satellite network operators, the ones who are in the process of establishing their networks, who have opted for this. But established player Iridium has indicated that they are in the process of enabling their constellation to support standards-based modules, although no word just yet on the timing of this. There still exist challenges however Spectrum allocation is not an infinite source, and here’s where we may see some ‘trade- offs’. SNOs with licensed Mobile satellite services (MSS), the frequencies reserved for satellite services, require no further agreements with terrestrial networks to send and receive data from a compatible device. Likewise, L-band, perhaps the best radio spectrum for satellite IoT applications, is also licensed, and already allocated to established players, such as Iridium and Inmarsat / Viasat. All this leaves new entrants with three options; they work with another radio spectrum, usually shared UHF / VHF; they work with terrestrial networks to repurpose cellular spectrum; or they work with the existing SNOs to rent their spectrum. Shared UHF / VHF has congestion and capacity issues, and is only viable where there
isn’t a great deal of competition, and there’s no geographical hindrance, such as forests or rough terrain. Many new entrants take the second option, by working with MNOs, where a company can persuade the MNO to reallocate part of its spectrum for the SNO. However, working with existing SNOs who already have licensed MSS spectrum and landing rights is the fastest way to achieving global service and a high-capability network. Given the huge IoT spectrum advantage they have, they’re going to be important in the success of future IoT networks, both proprietary and Standards-based. There is an interesting dynamic here; if SNOs lease spectrum without requiring a relatively high fee, they run the risk of their new partners cannibalising their market share. Satellite IoT opportunity beckons The technology now exists that will enable the satellite IoT market to grow, with new entrants with a small number of satellites offering a new class of service: lower prices and lower capability. This is ideal for markets where receiving data once or twice a day would be a good outcome; agriculture, and some environmental monitoring, for example. Meanwhile, the existing service class – higher prices, high capacity – continues to inch downwards in price but is far away from parity with cellular. Everywhere that satellite IoT is utilised today is mission-critical: pipeline monitoring, tsunami, flood and wildfire alarms, asset tracking, weather reporting, remote security alerts - this list goes on, with a shared characteristic that the data is needed in real- time. And that urgency commands a premium. The existing SNOs will have a huge influence on the rate at which these prices fall: either by adopting standards-based modules themselves, which should lead to a reduction in module pricing, or leasing their airtime at a competitive rate to start-ups. The tempting prospect of rate-switching between SNOs, however, is some way off, as the gulf in service proposition between the incumbent and new satellite networks is currently too great. It benefits no one to see so many new entrants fail, so while we chase the dream of lower pricing brought about by rate-switching and standards-based modules, we need to bear in mind the financial realities of operating a satellite network. Prices for high-capacity service will come down – but in our view, not as far or as fast as some of the hype would have you believe.
CONTINUED
Satellite IoT tends to be deployed in remote or even hazardous locations, adding a logistical ordeal to the already evident cost implication
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